Inter Organizational and Global Information Systems

Interorganizational Information System (IOS)

Interorganizational information system involves information flow among two or more organizations. Its major objective is efficient processing of transactions, such as transmitting orders, bills, and payments. It can be global or local. When IOSs use telecommunications companies for communication , they employ value-added networks (VANS). These are private. A growing trend is use of the Internet. These are publicly accessible.

ISO Support Technologies

The four major IOS technologies are: Electronic Data Interchange (EDI) the (EDI), electronic movement of business documents between business partners. Extranets, Extranets extended intranets that link business partners. XML, XML an emerging B2B standard, promoted as a companion or even a replacement for EDI systems. WEB Services the emerging technology for Services, integrating B2B and intra business applications.

Global Information Systems

Benefits
Effective communication at a reasonable cost. The partners are far from each other, yet they are able to work together, make decisions, monitor transactions, and provide controls. Business partners communicate through e-mail, EDI, Web Services (see the Dell opening case), and extranets. Communication is even more critical if the partners speak different languages. Intelligent IT systems can provide automatic translation. Effective collaboration to overcome differences in distance, time, language, and culture. Collaboration can be enhanced with groupware software (Chapter 3), group decision support systems (see Chapter 11), extranets, and teleconferencing devices (Chapter 3). Access to databases of business partners and ability to work on the same projects while their members are in different locations. Information technologies such as video teleconferencing and screen sharing (Chapter 3) are useful for this purpose.

Virtual Corporations and IT Support

A virtual corporation (VC) is an organization composed of two or more business partners, in different locations, sharing costs and resources for the purpose of producing a product or service.

Most VCs cannot exist without information technology.

E-mail Desktop videoconferencing Screen sharing and other groupware technologies EDI and EFT Database and network sharing

Inter-Organization Systems
Electronic Data Interchange (EDI) Electronic Commerce (EC) Electronic Fund Transaction (EFT) Electronic Mail (E-mail) Electronic Form (EF) Integrated Massaging and Shared Database

Electronic Commerce Categories

Business to Business (B2B) Business to Consumer (B2C) Business to Government (B2G) Government to Consumer (G2C) Consumer to Consumer (C2C)

Electronic Data Interchange

EDI is the electronic transmission of business data between or within firms in structured, computer processable data format, which permits information to be transferred without re-key from computer application in one location to computer application in the other location.

EDI Components
EDI Standards Communication Standards EDI Software EDI Networks

Sender
Application

Receiver
Application

Translator

Translator

VAN

Communication Software

EDI Network

Electronic Data Interchange (EDI) continued

EDI translators. An EDI translator converts data into a standard format before it is transmitted; then the standard form is converted to the original data. Business transactions messages. These include purchase orders, invoices, credit approvals, shipping notices, confirmations, and so on. Data formatting standards. Because EDI messages are repetitive, it makes sense to use formatting (coding) standards. In the United States and Canada, EDI data are formatted according to the ANSI X.12 standard. An international standard developed by the United Nations is called EDIFACT.

Application System

EDI Interface

Application System

Application Interface EDI Translator

Application System

Communications Interface

Application System

EDI Interface

Application System

Application Interface EDI Translator

Application System

Communications Interface

Communications Interface

EDI Interface EDI Translator Application Interface

Application System

Application System

Electronic Data Interchange (EDI) continued

Electronic Data Interchange (EDI) continued

Electronic Data Interchange (EDI) continued

EDI Benefits
Reduced overhead costs Reduction in labour Increased accuracy Improved communications and management control Improved inventory control Enabled retailers to be more responsive to consumer needs

Motivation Factors
Strategic
Better communication with trading partner Remaining competitive Butter customer service Reducing stock

Operational
Quick response & access to information Increase data accuracy

EDI Barriers
Difficulty of a cost/benefit evaluation The need to keep in use two information systems Standardisation Externalities of EDI applications can overstep the firms boundaries and modify the business and market perspective from competition to collaboration. Resistance to change.

Value Added Networks

In the most basic form, a VAN (Valued Added Network) acts as a regional post office. They receive transactions, examine the 'From' and the 'To' information, and route the transaction to the final recipient. VANs provide a number of additional services, e.g. retransmitting documents, providing third party audit information, acting as a gateway for different transmission methods, and handling telecommunications support. Because of these and other services VANs provide, businesses frequently use a VAN even when both trading partners are using Internet-based protocols. Healthcare clearinghouses perform many of the same functions as a VAN, but have additional legal restrictions that govern protected healthcare information. VANs also provide an advantage with certificate replacement in AS2 transmissions. Because each node in a traditionally business-related AS2 transmission usually involves a security certificate, routing a large number of partners through a VAN can make certificate replacement much easier.

Value Added Networks

Application System Appl Data EDI Translator EDI Data Communications Interface Value Added Network Communications Interface EDI Data EDI Translator Appl Data Application System

EDI via the Internet (Web EDI)

Traditional EDI system contains two major components: (1) EDI translation software that converts and maps EDI formats to/from internal business applications. (2) communication channels that deliver EDI documents to the desired trading partners.

EDI via the Internet (Web EDI)

1. Conversion of EDI Documents :
To translate EDI documents, one must first know what EDI standards the trading partner is using. EDI standards define the document formats that enable trading partners to speak the same language when conducting business activities with each other. The functionality of translation software could be obtained in three ways: lease or purchase software from a vendor; have a third party (such as a VAN) perform the translation; or develop software in-house. Business documents, once converted by the translator, are ready to deliver via communication channels.

EDI via the Internet (Web EDI)

2. Communication Channels:Trading partners traditionally exchange EDI documents via direct link, private or proprietary networks, and thirdparty VANs . Direct link networks, including leased lines, are the most straight-forward communication method. They allow a company to dial up and connect directly to partners' computers. They are most cost-effective alternative for transmitting high volumes of data and are thus very appealing to those large companies that must transmit huge amounts of data daily.

EDI via the Internet (Web EDI)

Private or Propriety Network, usually provided by a hub company, is a closed network only available to its trading partners (the spokes). The hub handles protocol conversion and administrative overheads so that the spokes can dial up to the hub private network without conversion and pay only the cost of a telephone call. This type of network is limited and is only available to those trading partners that have a close relationship. An automobile manufacturer and its part suppliers are a typical example.

EDI via the Internet (Web EDI)

Value-Added Network plays an intermediary role analogous to a post office or delivery service that provides reliable delivery of documents in a secure environment. VANs provide the following value added services to support EDI: mailboxing, protocol conversion, standard conversion, reliability, security, administration, implementation assistance, etc. In the traditional EDI environment, most companies exchange EDI documents via VANs. Despite the popularity, convenience, and flexibility of VANs, their costs are frequently the dominant expense of EDI.

EDI security and legal issues

EDI security The types of security controls networks should have are crucial when your organization adopts EDI as you and your trading partners are entrusting some of your most crucial and confidential data to the network. Securing an EDI system is much like securing any kind of computer network with this difference : EDI extends to more than one company. Not only must organizations make sure their system is secure, but their trading partners must all do the same. A full EDI security system should include three levels of security: Network level security Application level security Message level security

EDI security and legal issues

Network level security: This level of security basically screens users accessing a particular network. With a set of account/user identification codes coupled with the corresponding passwords, authorized users will be able to log into the network and to perform transactions (that is, sending and receiving of EDI messages) across the network. This level of security ensures that users not registered in the EDI network are not able to gain access to its facilities.

EDI security and legal issues

Application level security: Beyond network security, application level security can also be put in place. This level of security is usually controlled by the individual front-end EDI application (or software). A system administrator is usually appointed to oversee the EDI application to maintain a system that both identifies the data and monitors which password holders shall be given and to decide on the kind of access to the system.

EDI security and legal issues

Message level security: Message level security can also be put in place to combat unauthorized disclosure of message content, non-bona fide messages, duplication, loss or replay of messages, deletion of messages and repudiation of message responsibility by its sender or its receiver. To counter these, EDIFACT has in place several methods of message-level security: 1. Encryption 2. Message authentication 3. Hashing 4. Digital signatures

EDI application implementation

Any EDI application whether hosted or implemented via a packaged application involves four main component.

EDI application implementation

EDI and Infrastructure Layer: software and Hardware for converting data into and out of EDI. Mapping Layer: software for reconciling data between you and your trading partners.

EDI application implementation

Connectivity Layer: software and network technology for transporting data between you and your trading partner. Application Integration Layer: software for exchanging data into and out of your accounting system.